The introduction of the first commodity ETF cracked open an asset class that had once been off limits to a number of investors. Commodity investing was reserved only to those with complex futures trading accounts and who had the time and ability to actively trade. Now, the average Joe can add something like physical gold exposure to their portfolio with relative ease. Commodity ETFs have quickly become the most popular way to make a play on this volatile asset class, as investors have been relatively quick to adopt these securities [for more commodity ETF analysis subscribe to our free newsletter].
Below, we outline the ten most popular commodity ETFs for investors looking to hop in on the latest trend in the commodity space.
- United States Natural Gas Fund (UNG): UNG is one of the most infamous funds in the world, as it has long suffered due to the nasty effects of contango and a weak environment for NG. The fund trades more than 12 million times each day and has just over $1.1 billion in total assets. Natural gas futures are among the most volatile in the world, giving UNG its mass appeal, as active traders often seek out the big daily swings that this fund has to offer.
- iShares Silver Trust (SLV): For the time being, this physically-backed silver fund takes second place, though it often battles it out with the third place contender. SLV trades just over 10 million times each day and is nearing the $10 billion mark in total assets. Silver is another one of the more volatile commodity options out there, so it is no surprise to see this fund fall near the top of the list, as it is used as both a trading instrument and a long-term hold.
- SPDR Gold Trust (GLD): By far the largest commodity ETF in the world, GLD has just under $70 billion in assets and trades just over 9 million times on a daily basis. The fund’s massive popularity has made it the standard benchmark for gold investing as big name investors like George Soros and John Paulson have made large allocations to the ETF [see also Three Reasons Why Gold Is Overvalued].
United States Oil Fund (USO): Tracking front-month WTI crude contracts, USO has made a real name for itself, exchanging hands 8.5 million times on a daily basis. The fund has been especially active in recent weeks as the price of oil has remained volatile throughout the majority of summer.- COMEX Gold Trust (IAU): IAU also tracks physical gold, but instead represents 1/100th the price of an ounce of gold where GLD is representative of 1/10th ounce. IAU’s main appeal comes with its expense ratio of just 25 basis points compared to GLD’s 40. The fund currently trades 4.7 million shares each day and is coming very close to $10 billion in total assets.
- DB Commodity Index Tracking Fund (DBC): This broad-based fund aims to represent the entire commodity industry, as it invests in 14 of the most heavily traded commodities in the world. DBC has an average daily volume of 2.3 million and has just over $6 billion in assets.
- Ultra DJ-UBS Crude Oil (UCO): This fund is a leveraged version of USO, offering a 200% return on WTI crude contracts. Its leverage makes it too dangerous for a long term play, but its average volume of 2.2 million suggests that active traders enjoy dabbling in UCO [see also 25 Ways To Invest In Crude Oil].
- UltraShort DJ-UBS Crude Oil (SCO): This fund is simply the -200% version of USO, offering a great way to make a bet against crude oil. SCO currently trades 1.3 million shares each day.
- DB Agriculture Fund (DBA): DBA is another staple product for both traders and long term investors. The fund currently consists of 11 futures contracts, including corn, soybeans, sugar, live cattle, and more. DBA has more than $2 billion in total assets and trades approximately 1.2 million times each day.
- Ultra Silver (AGQ): This product aims to return 200% of the daily movements of silver, and it has seen some incredible performances. During a few month period early last year, this fund was able to jump more than 550% before crashing back to earth. AGQ currently trades 1.2 million shares each day.
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Disclosure: No positions at time of writing.
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